Quote:
Originally Posted by ozzy1
What i dont understand is with a population of approx 50 million why vat in the uk is 20% when here in Oz with a population of 20 million and Gst(vat) is 10%  and we feel ripped off |
The EU regulates the VAT rate. The regulated minimum is 15%, but most countries have it around 20%, give or take[1]. The brits had the best rate in the whole EU after Gibraltar, Canaries, Azores, Cyprus and Luxembourg.
Now, the reason for regulating VAT is that a lower VAT rate in one country *cough* *cough* would put it at a competitive advantage against neighbours due to a livelier economy and more export. And forcing the neighbours to reduce the VAT race would be bad as their budgets would suffer
[1]
http://en.wikipedia.org/wiki/EU_VAT#VAT_rates